The bellwether IHS Markit/CIPS UK Construction Total Activity Index recorded 45.3 in July – below the 50 no-change value.

The latest reading was up from June’s ten-year low of 43.1 but still signalled a marked downturn in total construction activity.

Commercial construction was the worst performing category in July, followed closely by civil engineering as Brexit fears cntinued to delay project starts.

House building fell for the second month in a row during July, but the rate of decline was only modest and eased from the three-year record seen in June.

Construction companies also reported a sharp drop in their confidence regarding the year-ahead outlook for business activity.

The latest reading was the lowest since November 2012 with companies blaming Brexit uncertainty, the prospect of a General Election and delays to infrastructure work.

Tim Moore, Economics Associate Director at IHS Markit, said:“UK construction output remains on a downward trajectory and another sharp drop in new orders has reduced the likelihood of a turnaround in the coming months.

“Total business activity declined at a softer pace than the ten-year record seen in June, but this should not detract attention from the challenges ahead for the construction sector. Customer demand has been squeezed on all sides in recent months, which has pushed down business expectations to the lowest since the second half of 2012.

“July data revealed declines in house building, commercial work and civil engineering, with all three areas suffering to some degree from domestic political uncertainty and delayed decision-making.

“Construction companies have started to respond to lower workloads by cutting back on input buying, staffing numbers and sub-contractor usage. If the current speed of construction sector retrenchment is sustained, it will soon ripple through the supply chain and spillovers to other parts of the UK economy will quickly become apparent.”